Q1 Preview: AT&T (T) May Also Look to Push Further Away from Expensive iPhone


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AT&T ( T ) is trading slightly lower heading into its first-quarter report, expected out before the market opens Tuesday. Shares are off about 0.5 percent Monday.

The Street is looking for EPS of 57 cents on revs of $31.85 billion in the quarter, compared with EPS of 58 cents and revs of $31.25 billion reported in the same period last year.

Shares of AT&T moved 4.8 percent higher through the quarter, to $30.79 at the end of March. Shares are about flat since then after ending FY11 up about 9.1 percent.

Investors will probably take a look at Verizon's ( VZ ) results to gauge what AT&T might do. Verizon beat on the top- and bottom-lines with EPS of 59 cents and revs of $28.24 billion. Overall, Verizon's data revenue rose 21.1 percent, indicating further adopting of data-hungry smartphones.

In terms of Apple (Nasdaq: AAPL) iPhone activations, Verizon reported 3.2 million, down 24 percent from the prior quarter. Assuming AT&T will see a similar drop, then it might have activated 5.78 million units in the quarter. Should AT&T see a typical 12 percent drop from Q4 to Q1, then iPhone activations might be much closer to 6.5 million units, or about 22 percent of the 30 million Apple is expecting to move in the quarter.

Data from Bloomberg has 15 analysts at Buy on AT&T, 22 are at Hold, and two maintain a Sell. The analyst price target average is $31.50, which ranges from $26 to $35. Over the last year, AT&T has traded within the range of $27.29 to $31.97.

With Apple's iPhone commanding large subsidies, Verizon appeared to be embracing a third mobile operating system in Microsoft's (Nasdaq: MSFT) Windows Phone, which was highlighted during the company's quarterly call. AT&T might be aiming to make a similar move. AT&T also has the contract on Nokia's ( NOK ) Lumia 900 4GLTE Windows Phone, so it will be interesting to hear what management has to say about sales there.

Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results within seconds of their release. You can also check out AT&T's past performance at Streetinsider's AT&T's Income Statement .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing Stocks
Referenced Stocks: AAPL , MSFT , NOK , T , VZ

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